Why some cryptocurrencies are worth $40,000, while others stay at $0.40

Market capitalization and asset supply factor into prices, but could any token be worth $1 million one day?

At the time of publication, one Bitcoin (BTC) values $47,247, while one Dogecoin (DOCE) is worth around $0.068. If you are new to crypto or markets, you may initially think: Hey, DOGE is cheaper than Bitcoin, and if it picks up enough steam, maybe it could catch up to BTC and rise over $20,000, too. This way of thinking, however, is illogical. Why? Market capitalization and asset supply. 

Market cap is the combined dollar value of an asset’s circulating supply. It changes as the value of a given asset rises and falls. Crypto metrics websites, such as CoinMarketCap, rank each cryptocurrency in order of market cap. Bitcoin is the long-standing front runner in this category, holding a market cap of about $879 billion at the time of publication.

Market cap takes each asset’s circulating supply into account. Circulating supply is the amount of any given asset freely moving around the market. Multiply the circulating supply by the asset’s price and you get its market cap.

Assets with more circulating supply often trade at cheaper prices in terms of dollar value per coin or token. BTC currently holds a comparatively low circulating supply of about 18.6 million, and even though this number increases slowly based on mining, its maximum supply is still relatively small at 21 million coins. Meanwhile, Dogecoin has a circulating supply of about 128.3 billion, based on CoinMarketCap numbers.

Given DOGE’s circulating supply, its market cap would hit approximately $800 billion if each coin were priced at roughly $6.23. Meanwhile, Bitcoin is worth more than $40,000 per coin near that same market cap due to its lower circulating supply.

Reaching a price of even $1,500 per DOGE would require the asset to have a market cap of roughly $192.4 trillion. At the time of publication, the entire crypto market has a market cap of about $1.46 trillion.

Generally, assets with low circulating supply can rise higher in price per coin than assets with large supply counts. Yearn.finance’s YFI, for example, holds a very small circulating supply of just 36,635. YFI went from approximately $900 in July 2020 to $40,000 in September 2020. A multitude of other components factor into price rises, but typically, if an asset has a comparatively larger circulating supply, its price per coin cannot be directly compared to the price of coins with a smaller supply.

Crypto assets also often hold a maximum supply programmed into their code. Each asset’s available supply grows continuously through various forms of blockchain network validation — i.e., mining or staking — until it reaches its maximum supply. Prices can dilute as coins or tokens flow into their related circulating supply, as validators tend to sell their rewards for supporting the network to pay off their costs of doing business.

What is the difference between total supply and maximum supply? “Total supply refers to the number of coins or tokens that currently exists and are either in circulation or locked somehow writes Henrique Erhardt in an article for Binance Academy, adding: “It is the sum of coins that were already mined (or issued) minus the total of coins that were burned or destroyed.”

Meanwhile, the maximum supply is an asset’s entire all-time supply or, more specifically, the total amount of coins or tokens that have or can be created. This means that once the maximum supply is reached, there would be no way to produce any more coins or tokens.

Understanding the concept of market cap as it relates to any given asset’s price can be important, allowing you to assess the crypto space more realistically. You may look at the price of a single Bitcoin and view it as too expensive, immediately shifting your focus toward something cheaper.

A plethora of information goes into crypto investing. Assets vary in their use cases, adoption, profit potential and associated risks, among other factors. Viewing each asset in light of its particular market cap, price and supply, however, can help in evaluating the market.

SOURCE

Cointelegraph.com

Crypto cross-border payments, explained

How do crypto cross-border payments work?

These transactions are executed using blockchains — eliminating the need for banks, who often slow payments down substantially.

Let’s imagine that you’re in Spain but want to send funds to Africa. The first step involves converting fiat currency into a digital asset of your choice. A wide range of websites and platforms exist that serve as an “on-ramp” — meaning purchases can be made using bank transfers and credit cards.

This cryptocurrency can be held in a secure wallet. When it’s time to make a transfer to your friends, they can give you the address for their wallet — comparable to the account number you’d get at an old-fashioned bank. These addresses can contain dozens of characters, so transcribing them carefully is crucial.

Once funds have arrived in an account, the recipient has several choices. They can either convert the crypto to fiat and withdraw it, or swap it for a less volatile digital asset such as a stablecoin.

What advantages does crypto offer over fiat?

It’s cheaper and faster… and could also help clamp down on money laundering.

There’s a lot of excitement surrounding how crypto could transform cross-border payments as we know it — making remittances, where workers in foreign countries send funds to their loved ones back home, much less expensive.

At present, the World Bank estimates that remittances sent through fiat channels result in average fees of 6.75%. For someone on a modest income, this can take a substantial chunk out of their earnings. Although this is less than the 9.67% charged in 2009, there’s still a long way to go. In the early 2010s, the G8 and the G20 set a target of slashing remittance costs to 5% — and the United Nations’ Sustainable Development Goals also set a target of 3% by 2030.

Cryptocurrencies could help these goals be realized much faster. According to figures from Deloitte, blockchain has the potential to reduce transaction costs by 40% to 80%. But the advantages may not end here. Currently, it can take three to five business days for funds to clear through old-fashioned wire networks — not ideal for someone who needs money in a hurry. But on certain blockchains, it’s possible for payments to be confirmed in seconds.

The advantages may not end here. As Deloitte notes, blockchain transactions can be data rich — meaning that metadata can be transmitted from end to end. All of this can help clamp down on money laundering and terrorist financing, two areas of concern for regulators. Many crypto platforms have introduced Know Your Customer checks to verify users, too.

One crucial benefit that cryptocurrencies can offer is unlocking access to financial services for the unbanked. Research suggests that 80% of consumers in sub-Saharan Africa fall into this category — and worldwide, a total of 1.7 billion people don’t have a bank account. There can be a multitude of reasons for this. Financial institutions may not operate in their geographic area, these services could be too expensive, or consumers may have a lack of trust.

How much money is sent around the world using crypto?

Digital assets have a modest market share of overall cross-border payments — but demand is growing.

According to Juniper Research, international digital remittances are set to surge to $525 billion by 2024… a 102% rise from where they were in 2019. This figure includes fintech platforms that solely deal in flat.

“Utilizing a blockchain-powered network, operators can offer their users a much faster, cheaper and more transparent service,” the authors said.

This view has been echoed by BlockData, which recently revealed that blockchain-based transactions are typically 388 times faster and 127 times cheaper than traditional remittances.

It’s a fast-moving industry, and it’s difficult to put an exact number on the volumes of cross-border payments made using crypto. However, figures from Clovr showed that 15% of those who made remittances from the U.S. in 2017 used a digital asset such as Bitcoin — making it more popular than prepaid cards, checks and cash. When it comes to business-to-business payments made via blockchain, this figure stood at $171 billion in 2019, but Juniper Research estimates that this will exceed $4.4 trillion in just four years’ time.

What are the downsides to using crypto?

The likes of Bitcoin often get criticized for being too volatile, and some say blockchain technology is too difficult for everyday consumers to understand.

It’s important to note that there’s one factor that will determine whether or not crypto-based cross-border payments are cheaper: the digital asset that’s being used.

Making transfers using Bitcoin and Ether can be expensive, especially during times of peak demand. Ethereum has been overwhelmed by transaction volumes on multiple occasions over the years — fueled by a rise in demand for collectible cats and decentralized finance. Addressing scalability concerns is going to be crucial if cryptocurrencies are going to be used more widely for remittances. Ripple, which doesn’t have a blockchain, offers solutions that are designed to make cross-border payments less expensive through the XRP asset. Several banks are already on board, and Ripple claims that it can process 50,000 transactions per second.

Crypto will only help to solve financial inclusion provided that those who stand to benefit most from remittances can be educated about how digital assets work, and have access to internet-enabled smartphones so they can access their funds. There are reasons to be optimistic here. As we mentioned earlier, 80% of consumers in sub-Saharan Africa are unbanked, yet 91% own a mobile phone — and smartphone adoption is rising. On the continent, mobile payments are also exceedingly popular, meaning that the leap to crypto-based transactions may not be a big one.

The final challenge concerns regulation. Industry executives have warned that more crypto regulation is coming, with the European Union recently announcing plans to comprehensively monitor the market in just four years’ time. This doesn’t necessarily mean that a ban on digital assets is on the horizon — indeed, many lawmakers have acknowledged that they can have advantages in reducing the costs associated with cross-border payments. As a result, some are exploring whether they should launch their own central bank digital currency.

SOURCE:

CHANGELLY Partnership material

4 cryptos gain over 400% in a month, far outperforming Bitcoin

Four crypto assets have had their value surge by more than 400% while significantly outmatching the flagship crypto asset, Bitcoin, amidst a relatively bullish trend in play.

CryptoDiffer, a crypto information company, disclosed such data on its Twitter feed.

Staking platform, Ramp Defi (RAMP), had rallied by more than 465% for the last month by January 15th, coupled with outperforming Bitcoin by 5 times.The crypto asset traded around $0.04 on December 16th before exploding to an all-time high of $0.28 on January 13th, according to Coinmarketcap.

The third crypto asset eclipsing Bitcoin in monthly returns is the blockchain transaction tracking protocol known as Parsiq (PRQ). PRQ had gained 414% in 30 days and exceeded BTC’s performance by 4.2 times.

The fourth digital currency is known as DeFiChain (DFI) printing gains of a 401% surge.

Crypto cross-border payments, explained

1.

How do crypto cross-border payments work?

These transactions are executed using blockchains — eliminating the need for banks, who often slow payments down substantially.

Let’s imagine that you’re in Spain but want to send funds to Africa. The first step involves converting fiat currency into a digital asset of your choice. A wide range of websites and platforms exist that serve as an “on-ramp” — meaning purchases can be made using bank transfers and credit cards.

This cryptocurrency can be held in a secure wallet. When it’s time to make a transfer to your friends, they can give you the address for their wallet — comparable to the account number you’d get at an old-fashioned bank. These addresses can contain dozens of characters, so transcribing them carefully is crucial.

Once funds have arrived in an account, the recipient has several choices. They can either convert the crypto to fiat and withdraw it, or swap it for a less volatile digital asset such as a stablecoin.2.

What advantages does crypto offer over fiat?

It’s cheaper and faster… and could also help clamp down on money laundering.

There’s a lot of excitement surrounding how crypto could transform cross-border payments as we know it — making remittances, where workers in foreign countries send funds to their loved ones back home, much less expensive.

At present, the World Bank estimates that remittances sent through fiat channels result in average fees of 6.75%. For someone on a modest income, this can take a substantial chunk out of their earnings. Although this is less than the 9.67% charged in 2009, there’s still a long way to go. In the early 2010s, the G8 and the G20 set a target of slashing remittance costs to 5% — and the United Nations’ Sustainable Development Goals also set a target of 3% by 2030.

Cryptocurrencies could help these goals be realized much faster. According to figures from Deloitte, blockchain has the potential to reduce transaction costs by 40% to 80%. But the advantages may not end here. Currently, it can take three to five business days for funds to clear through old-fashioned wire networks — not ideal for someone who needs money in a hurry. But on certain blockchains, it’s possible for payments to be confirmed in seconds.

The advantages may not end here. As Deloitte notes, blockchain transactions can be data rich — meaning that metadata can be transmitted from end to end. All of this can help clamp down on money laundering and terrorist financing, two areas of concern for regulators. Many crypto platforms have introduced Know Your Customer checks to verify users, too.

One crucial benefit that cryptocurrencies can offer is unlocking access to financial services for the unbanked. Research suggests that 80% of consumers in sub-Saharan Africa fall into this category — and worldwide, a total of 1.7 billion people don’t have a bank account. There can be a multitude of reasons for this. Financial institutions may not operate in their geographic area, these services could be too expensive, or consumers may have a lack of trust.3.

How much money is sent around the world using crypto?

Digital assets have a modest market share of overall cross-border payments — but demand is growing.

According to Juniper Research, international digital remittances are set to surge to $525 billion by 2024… a 102% rise from where they were in 2019. This figure includes fintech platforms that solely deal in flat.

“Utilizing a blockchain-powered network, operators can offer their users a much faster, cheaper and more transparent service,” the authors said.

This view has been echoed by BlockData, which recently revealed that blockchain-based transactions are typically 388 times faster and 127 times cheaper than traditional remittances.

It’s a fast-moving industry, and it’s difficult to put an exact number on the volumes of cross-border payments made using crypto. However, figures from Clovr showed that 15% of those who made remittances from the U.S. in 2017 used a digital asset such as Bitcoin — making it more popular than prepaid cards, checks and cash. When it comes to business-to-business payments made via blockchain, this figure stood at $171 billion in 2019, but Juniper Research estimates that this will exceed $4.4 trillion in just four years’ time.4.

What are the downsides to using crypto?

The likes of Bitcoin often get criticized for being too volatile, and some say blockchain technology is too difficult for everyday consumers to understand.

It’s important to note that there’s one factor that will determine whether or not crypto-based cross-border payments are cheaper: the digital asset that’s being used.

Making transfers using Bitcoin and Ether can be expensive, especially during times of peak demand. Ethereum has been overwhelmed by transaction volumes on multiple occasions over the years — fueled by a rise in demand for collectible cats and decentralized finance. Addressing scalability concerns is going to be crucial if cryptocurrencies are going to be used more widely for remittances. Ripple, which doesn’t have a blockchain, offers solutions that are designed to make cross-border payments less expensive through the XRP asset. Several banks are already on board, and Ripple claims that it can process 50,000 transactions per second.

Crypto will only help to solve financial inclusion provided that those who stand to benefit most from remittances can be educated about how digital assets work, and have access to internet-enabled smartphones so they can access their funds. There are reasons to be optimistic here. As we mentioned earlier, 80% of consumers in sub-Saharan Africa are unbanked, yet 91% own a mobile phone — and smartphone adoption is rising. On the continent, mobile payments are also exceedingly popular, meaning that the leap to crypto-based transactions may not be a big one.

The final challenge concerns regulation. Industry executives have warned that more crypto regulation is coming, with the European Union recently announcing plans to comprehensively monitor the market in just four years’ time. This doesn’t necessarily mean that a ban on digital assets is on the horizon — indeed, many lawmakers have acknowledged that they can have advantages in reducing the costs associated with cross-border payments. As a result, some are exploring whether they should launch their own central bank digital currency.5.

How can you easily, securely store and exchange cryptocurrencies?

By using a platform that has a carefully cultivated reputation for keeping digital assets safe.

Crypto platforms are emerging that aim to make cross-border payments far less expensive than what many of us are accustomed to.

One of them is Changelly PRO. The company firmly believes that cryptocurrencies offer far greater levels of transparency than traditional financial institutions, and this will help instill confidence among consumers. Dozens of trading pairs are offered across the world’s biggest digital assets.

The platform is aiming to level the playing field by offering zero deposit fees, as well as competitive fees when funds are withdrawn from an account. This is coupled with an easy-to-use, intuitive interface — and 24/7 support for users around the world. Changelly PRO says its priority is making crypto simple, and offering cutting-edge solutions that beginner and professional traders alike will find advantageous. 

Education is another area that Changelly PRO is hoping to address. To ensure that newcomers can get the most out of the service, in-depth learning materials cover everything from setting up an account to keeping it secure.

In September, the platform unveiled a brand-new iOS app for iPhones, giving users the freedom to complete transactions while on the move. This will also prove advantageous for those who don’t use a computer.

With demand for remittances unlikely to subside, crypto-focused platforms are likely to play an instrumental role in delivering a fairer deal for consumers. This could help inject some much-needed competition in the space, forcing traditional institutions to innovate.

Source: Changelly PRO Partnership material.

Ray Hushpuppi and Mr. Woodbery Used BTC & Gemini Exchange to Siphon Millions

gold colored bitcoin on railroad
Photo by Worldspectrum on Pexels.com

Ray Hushpuppi and Mr. Woodbery converted millions of dollars into Bitcoin via Gemini exchange according to an FBI criminal complaint.

The two Nigerians jetsetters who filled their Instagram accounts with pictures of their ostentatious wealth were extradited from Dubai to the United States. According to the FBI, they were able to convert millions of dollars into Bitcoin (BTC) via the Gemini exchange.

Transaction summary for Bitcoin address 16AtGJbaxL2kmzx4mW5ocpT2ysTWxmacWn. Source: Crystal Blockchain

Transaction summary for Bitcoin address 16AtGJbaxL2kmzx4mW5ocpT2ysTWxmacWn. Source: Crystal Blockchain

The two are Olalekan Jacob Ponle, also known as “Mr. Woodbery,” and “Mark Kain,” and Ramon Olorunwa Abbas, who used the aliases “Ray Hushpuppi” and “Hush”. The FBI complaint focused on the former’s activities and how he used Bitcoin to transfer the stolen funds.

Business email compromise — 1,500 BTC

According to the FBI, Ponle along with his accomplices was engaging in a scheme known as business email compromise or BEC. A criminal would gain access to a legitimate business email account and then manipulate the company’s employees into transferring company funds to the criminal’s bank account. The complaint alleges that Ponle and his accomplices defrauded American companies of tens of millions of dollars while converting $6.5 million into 1,500 BTC:

“Preliminary blockchain analysis indicates that PONLE received at least 1,494.71506296 bitcoin related to these BEC schemes, valued at approximately $6,599,499.98 at the time he received the proceeds.”

The complaint said it is clear that Ponle was not terribly concerned with covering his tracks on the Bitcoin network as he has been using the same address (16AtGJbaxL2kmzx4mW5ocpT2ysTWxmacWn) since 2014, though the complaint focuses on his illicit activity throughout 2019 only.

Gemini Exchange

Gemini was the criminals’ favorite exchange. This may seem surprising, considering that the exchange is considered one of the most compliant in the industry. However, this choice can probably be explained by the fact the accused needed a U.S.-based exchange that caters to businesses.

On Feb. 15, 2019, Ponle’s associate confirmed that $2,149,000 had been successfully deposited to Gemini and converted to BTC.

A discussion between Ponle and his associate of the Feb. 15, 2019 transaction

A discussion between Ponle and his associate of the Feb. 15, 2019 transaction

These transactions, when traced on the Bitcoin blockchain, amounted to 340 and 261 BTC each, 601 BTC in total. At the time, Bitcoin price was at around $3,500.

Two Bitcoin transactions from Gemini exchange to Ponle’s address. Source: Crystal Blockchain

Two Bitcoin transactions from Gemini exchange to Ponle’s address. Source: Crystal Blockchain

FBI Infiltrates Ponle’s Inner Circle

Another transaction took place on Jan. 17, 2019 when Ponle’s accomplice converted $119,000 into 33.13 BTC — in the FBI complaint, it mistakenly says 3.13 instead. This transaction originated from an unidentified address, but it is one hop away from another American exchange — Kraken. Although the latter is not mentioned in the complaint.

In July, the FBI was able to infiltrate Ponle’s inner circle when an agent began communicating with Ponle online using the same handle that was previously used by one of his associates. On Sept. 9, 2019, a discussion between Ponle and his associate about converting $5 million to Bitcoin took place.

A discussion between Ponle and his associate of the Sept. 9, 2019 transaction

A discussion between Ponle and his associate of the Sept. 9, 2019 transaction

Unbeknown to Ponle, this time it was an FBI agent at the other end of the chat. Although the complaint does not specify it, this transaction presumably never happened as no associated transaction can be identified with the “16AtGJ BTC Wallet.”

Cashing Out Via LocalBitcoin & Huobi

Whereas Gemini was the exchange of choice for converting stolen fiat into Bitcoin, LocalBitcoins and Huobi were preferable choices for cashing out. According to Crystal Blockchain, 577 BTC was cleared via the former and 539 BTC via the latter. Both have been criticized for lax KYC procedures in the past.

Ponle and his colleague Abbas lived a life of ostentatious wealth, parading their newly acquired fortunes on Instagram. In one of his last posts, Ponle admonished his followers against the guilt associated with wealth:

“YOU ARE WORTH THE PLEASURES OF YOUR LABOR 💙 Stop letting people make you feel guilty for the wealth you’ve acquired, especially when you paid in blood, sweat and tears, to have the things that are deemed “ un-purchase-able”.”

Ponle’s Instagram post. Source: Instagram

Ponle’s Instagram post. Source: Instagram

Now the court will determine his guilt.